Costa Rica: Growth accelerates in Q4 on improved investment
March 31, 2017
According to data released by the Central Bank on 31 March, the economy ended last year on a high note. In the fourth quarter of 2016, GDP grew by 4.3% over the same quarter a year earlier, beating analysts’ projections of a 3.7% expansion. The reading marked an acceleration from Q3’s revised 3.4% expansion (previously reported: +4.4% year-on-year), and was driven by a notable improvement in fixed investment.
In Q4, total consumption moderated from Q3’s 3.8% increase to a slower 3.6% expansion. The greatest improvement was noted in fixed investment, which declined at a more moderate 0.4% pace (Q3: -3.2% yoy). Moreover, private consumption growth remained broadly stable at 3.8%, in line with Q3’s reading, while government spending growth slowed to 2.9% (Q3: +3.6% yoy).
The strong result also came largely on the back of a dynamic external sector. While exports growth remained robust, clocking in at 9.4% (Q3: +10.0% year-on-year), it was a drop in imports growth (Q4: +5.1% yoy; Q3: +3.3% yoy) that held the external sector’s overall contribution to economic growth steady. Net exports growth contributed 0.2 percentage points to GDP.
Author: Christopher Thomas, Economist